Oct. 1929 investors’ confidence dropped market collapse Panic Selling Everyone sell at once bottom fell out of market many bankruptcies as banks called in loans Even though a tiny minority traded stocks they possessed vast wealth crash had a ripple effect on the economy

PRODUCTIVITY AND UNEMPLOYMENT • 1920's • U. S. Eco. was based on Economic Cycle • Production of goods • demand had to be there • resulted in high employment and a healthy economy • 1924 -27 Overproduction • • productive capacity doubled technological innovation no new jobs were added more consumer goods but not enough people to buy them

Uneven Distribution of Wealth • 0. 1% at top owned as much as bottom 42% of American families • 42% below poverty line • Middle Class • • 58% above the poverty line not wealthy had jobs from industrialization & consumerization lost jobs when productivity declined • Low savings • cut back on purchases • Decline in consumption

Other Agencies • NATIONAL YOUTH ADMIN. (NYA) • jobs for young in urban areas • FED. EMERGENCY RELIEF ACT (FERA) • aimed at older workers • Worked well, but… • unemp. was still at 6 million in 1941 • solution for this would be the ind. boom of WW 2